MIRA
INFORM REPORT
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Report Date : |
26.09.2007 |
IDENTIFICATION DETAILS
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Name : |
RELIANCE
PETROLEUM LIMITED |
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Country : |
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Registered Office : |
Motikhavdi, P.O. Digvijaygram, District |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
24.10.2005 |
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Com. Reg. No.: |
04-48030 |
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CIN No.: [Company
Identification No.] |
U11100GJ2005PLC048030/U99999MH2005PTC156971 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
RKTR01044B |
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PAN No.: [Permanent
Account No.] |
AAACR5691P |
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Legal Form : |
A Public Limited
Liability Company. The company’s shares are listed on the stock exchanges. |
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Line of Business : |
Company is setting
up a Refinery Project |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 530000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a part
of Reliance Group, country’s premier industrial house. Fundamentals are strong
and healthy. Payments are always correct and as per commitments. The company can
be considered good for any normal business dealings. It can be
regarded as a promising business partner in a medium to long-run. |
LOCATIONS
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Registered Office : |
Motikhavdi, P.O. Digvijaygram, District |
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Tel. No.: |
91-288-3011 805 |
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Fax No.: |
91-288-3011850 |
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E-Mail : |
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Website : |
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Corporate Office : |
3rd Floor, Maker Chambers IV, 222 Nariman Point, Mumbai 400
021, |
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Tel. No.: |
91-22-2278 5214 / 2278 5568 / 2278 5585 / 2278
5589 / 2278 5000 / 2278 5185 / 2278 5560 |
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Fax No.: |
91-22-2278 5111 |
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E-Mail : |
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Website : |
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Project Location : |
Special Economic Zone, Taluka
Lalpur, District |
DIRECTORS
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Name : |
Mr. Mukesh
D. Ambani |
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Designation : |
Non-Executive
Chairman |
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Address : |
Sea Wind,
39, Cuffe Parade, Colaba Mumbai 400 005 |
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Date of Birth/Age : |
49 Years |
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Other
Directorships |
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Name : |
Mr. Hital
R. Meswani |
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Designation : |
Director |
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Address : |
Woodlands,
Flat No C – |
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Date of Birth/Age : |
38 Years |
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Other
Directorships |
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Name : |
Mr. Manoj
Modi |
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Designation : |
Director |
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Address : |
Flat No. 7,
BEST Apartments,Walkeshwar, Mumbai 400 006 |
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Date of Birth/Age : |
49 Years |
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Other
Directorships |
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Name : |
Mr. P. M.
S. Prasad |
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Designation : |
Director |
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Address : |
92/93, Bakhtawar
Co-operative Society Limited, 22, Mumbai 400
006 |
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Date of Birth/Age : |
55 Years |
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Other
Directorships |
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Name : |
Mr.
Yogendra P. Trivedi |
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Designation : |
Director |
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Address : |
“Mistry
Manor”, 62-A Napean Sea Road Mumbai 400 006 |
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Date of Birth/Age : |
78 Years |
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Other
Directorships |
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Name : |
Mr. Mahesh
P. Modi |
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Designation
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Director |
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Address
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B-92
Sector 27Noida 201 301 (U.P.) |
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Date of
Birth/Age : |
67 Years |
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Other
Directorships |
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Name : |
Mr. Atul
S. Dayal |
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Designation
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Director |
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Address
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21,
Valentina, |
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Date of
Birth/Age : |
58 Years |
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Other
Directorships |
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Name : |
Mr. Bobby
Parikh |
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Designation
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Director |
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Address
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7th Floor,
The Jackers, |
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Date of
Birth/Age : |
42 Years |
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Other
Directorships |
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Name : |
Mr.
Jagjeet Singh Bindra |
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Designation
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Director
[June 21, 2006] |
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Name : |
Mr.
Michael Warwick |
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Designation
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Director |
KEY EXECUTIVES
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Name : |
Mr. K
Sethuraman |
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Designation
: |
Company Secretary
and Compliance Officer |
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Address
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3rd Floor,
Maker Chambers IV,222 Nariman Point, Mumbai 400 021, |
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Date of
Birth/Age : |
91 22 2278
5214 |
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Qualification
: |
91 22 2278
5111 |
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Experience
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Name : |
Mr. Ramesh
Kumar Damani |
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Designation
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Company
Secretary |
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Audit
Committee : |
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MAJOR SHAREHOLDERS
As on 30.06.2007
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Shareholding of Promoter and Promoter Group2 |
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Indian |
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Bodies Corporate |
3375000000 |
75.00 |
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Foreign |
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Bodies Corporate |
225000000 |
5.00 |
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Public shareholding |
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Institutions |
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Mutual Funds/ UTI |
44468619 |
0.99 |
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Financial Institutions / Banks |
162188506 |
3.60 |
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Insurance Companies |
98513624 |
2.19 |
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Foreign Institutional Investors |
137323160 |
3.05 |
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Non-institutions |
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Bodies Corporate |
138287918 |
3.07 |
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Individuals |
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Individuals -i. Individual shareholders holding nominal
share capital up to Rs 0.100 Million |
276394929
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6.14 |
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ii. Individual shareholders holding nominal share capital in
excess of Rs. 0.100 Million |
32380231 |
0.72 |
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Any Other (specify) |
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NRI |
10443013 |
0.23 |
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TOTAL |
4500000000 |
100.00 |
Top 10
Shareholders as on March 31, 2007
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Names of Shareholders |
No. of Shares |
Percentage of Holding |
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Reliance Industries Limited |
3375000000 |
75.00 |
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Chevron India Holdings Pte Limited |
225000000 |
5.00 |
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Life Insurance Corporation of |
82176682 |
1.83 |
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Fidelity Shares and Securities Private Limited |
75000000 |
1.67 |
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State Bank of |
52000000 |
1.16 |
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Goldman Sachs Investments |
47006197 |
1.03 |
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Industrial Development Bank of India Limited |
33612406 |
0.75 |
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26691798 |
0.59 |
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Global Investment House (K.S.C.C.) |
22000000 |
0.49 |
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Punjab National Bank |
21500000 |
0.48 |
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Total
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3959987083 |
88.00 |
BUSINESS DETAILS
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Line of Business : |
Company is
setting up a in Refinery Project |
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Products : |
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GENERAL INFORMATION
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Bankers : |
State Bank
of Corporate
Accounts Group Branch, Tel: 91-22-2267 1916 Fax:
91-22-2267 9030 HDFC Bank
Limited Tel:
91-22-2270 3390 Fax:
91-22-2270 3392 IDBI Bank
Limited 224 A
Mittal Court, A Wing, Nariman Point, Mumbai 400021 Tel:
91-22-2202 4831 Fax:
91-22-2282 4071 ICICI Bank
Limited 215, Free
Press House, Nariman Point, Mumbai 400021 Tel:
91-22-2284 2947 Fax:
91-22-2285 3591 |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
Chaturvedi & Shah Chartered
Accountants (member
of Nexia International) A-3,
Laxmi Towers, first floor, Bandra Kurla Complex, Bandra (East), Mumbai 400
051, India. Tel: 91-22-3061 6100 Fax:
91-22-3061 6125 Deloitte Haskins & Sells Chartered
Accountant, 12,
Tel: 91-22-5667 9000 Fax: 91-22-5667 9100 |
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Subsidiaries : |
Ř
Reliance Jamnagar Infrastructure Limited |
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Associates : |
Ř
Reliance Utilities and Power Limited Ř
Ř
Indian Petrochemicals Corporation Limited |
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Holding Company : |
Ř
Reliance
Industries Limited |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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10,000,000,000 |
Equity Shares |
Rs. 10/- Each |
Rs. 100000.000 Millions |
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5,000,000,000 |
Preferences
Shares |
Rs. 10/- Each |
Rs. 50000.000 Millions |
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Total |
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Rs. 150000.000
Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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450 00 00 000 |
Equity Shares |
Rs. 10/- Each |
Rs. 45000.000 Millions |
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Less : Calls in
Arrears – by others |
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Rs. 0.488 Million |
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Total |
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Rs. 44999.512 Millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
28.02.2006 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
44999.512 |
27000.000 |
27000.000 |
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2] Share Application Money |
0.000 |
4500.000 |
0.000 |
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3] Reserves & Surplus |
89488.700 |
0.000 |
0.000 |
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4] Miscellaneous Expenditure |
0.000 |
0.000 |
0.000 |
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NETWORTH |
134488.212 |
31500.000 |
27000.000 |
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LOAN FUNDS |
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1] Secured Loans |
54670.000 |
0.000 |
0.000 |
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2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
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TOTAL BORROWING |
54670.000 |
0.000 |
0.000 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
189158.212 |
31500.000 |
27000.000 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
1616.478 |
19036.138 |
11119.210 |
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Capital work-in-progress |
185900.910 |
0.000 |
15905.460 |
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INVESTMENT |
2280.339 |
7985.263 |
0.000 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
0.000
|
0.000 |
0.000 |
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Sundry Debtors |
0.000
|
0.000 |
0.000 |
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Cash & Bank Balances |
95.531
|
4509.617 |
0.960 |
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Other Current Assets |
0.000
|
0.000 |
0.000 |
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Loans & Advances |
5785.801
|
2.212 |
0.000 |
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Total Current Assets |
5881.332
|
4511.829 |
0.960 |
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current Liabilities |
6515.199
|
55.350 |
49.730 |
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Provisions |
5.648
|
3.519 |
0.300 |
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Total Current Liabilities |
6520.847
|
58.869 |
50.030 |
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Net Current Assets |
[639.515]
|
4452.960 |
(49.070) |
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MISCELLANEOUS EXPENSES |
0.000 |
25.639 |
24.400 |
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TOTAL |
189158.212 |
31500.000 |
27000.000 |
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KEY RATIOS
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PARTICULARS |
|
31.03.2007 |
31.03.2006 |
28.02.2006 |
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Debt Equity Ratio (Total Liability/Networth) |
|
0.45
|
0.00 |
0.00 |
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Current Ratio (Current Asset/Current Liability) |
|
0.90
|
76.64 |
0.02 |
LOCAL AGENCY FURTHER INFORMATION
Reliance
Infrastructure Limited (“RFL”), a subsidiary of RIL, intends to lease about
1,700 acres of land to us for the Project. To date, it has acquired about 1,100
acres of land and needs to acquire an additional 600 acres of land in order
that they may implement the Project. Any delay in acquiring such land by RFL or
subsequently leasing it to us will have a material adverse effect on the
Project. There can be no assurance that RFL will acquire the necessary land and
lease it to us, or that it will do so in a timely manner. The timely completion
of the Project involves managerial and logistical challenges for RIL, RIL’s
Affiliates and us. Any significant delay in completing the Project as planned
or on schedule may result in RPL commencing operations in an increased
competitive environment for premium products. This may be due to the addition
of new refining capacity by competitors as well as upgradation of existing
refineries. Such a scenario may have a material adverse effect on their
business, results of operations and financial condition.
Operations
- Implementation of the Project:
The Company is making rapid strides on setting up a greenfield petroleum
refinery having a total atmospheric distillation capacity of approximately
580000 barrels per stream day and polypropylene plant having a capacity to
produce 0.9 million tonne per annum. The project, being set up in a Special
Economic Zone (SEZ) at Jamnagar in Gujarat at an estimated cost of Rs.270000
Millions, witnessed significant progress during the year and has achieved
several key milestones within a short period of 16 months since kick-off.
During the year under review, all significant statutory approvals, including
SEZ approvals, have been obtained. The equity financing of the project was
completed through the Company's initial public offer. The ITO received an
unprecedented response from domestic and international investors and created
several new in the history of the Indian Capital Market. Debt financing of the
project has also been evincing equally encouraging and path breaking response
from banks and institutions across continents and is progressing as per
schedule.
The project is being implemented aggressively with basic engineering and a
major part of detailed engineering already complete. Civil, structural and
mechanical works are going on in full swing leading to substantial change in
the skyline at the site. Procurement and contracting activities for all long
lead and critical equipments have been completed and emphasis directed towards
vendor monitoring to ensuring compliance with quality and delivery
commitments.
As on March 31, 2007, the Company has utilised Rs.189390 Millions for the
Project. The projected utilisation of funds as per the Prospectus dated April
28, 2006 was Rs.115910 Millions. The variation is mainly due to payments in
advance under various project contracts to ensure continued efficient and
speedy implementation of the Project.
Progress made on all aspects of implementation is satisfactory and the project
is well on its way towards scheduled completion by December 2008.
The Company has not commenced revenue operations hence no profit and loss
account has been prepared.
Management's Discussion & Analysis
Report:
A detailed review of the progress of the project and the future outlook of the
Company and its business, as stipulated under Clause 49 of the Listing
Agreement with the Stock Exchanges, is presented in a separate section forming
part of the Annual Report.
Fixed Deposits:
The Company has not accepted any fixed deposits during the year under
review.
Promoter
Group Companies:
Pursuant to an intimation from Promoter i.e. Reliance Industries Limited (RIL),
names of Promoters and companies comprising the 'group' as defined in the
Monopolies and Restrictive Trade Practices ('MRTP') Act, 1969, have been
disclosed in the Annual Report of the Company.
MANAGEMENT'S DISCUSSION ANALYSIS
Forward Looking Statements:
This
report contains forward looking statements, which may be identified by their
use of words like 'plans', 'expects', 'will', 'anticipates', 'believes',
'intends', 'projects', 'estimates' or other words of similar meaning. All
statements that address expectations or projections about the future, including
but not limited to statements about the company's strategy for growth, product
development, market position, expenditures and financial results, are forward
looking statements. Forward looking statements are based on certain assumptions
and expectations of future events. The company cannot guarantee that these
assumptions and expectations are accurate or will be realised. The company's
actual results, performance or achievements could thus differ materially from
those projected in any such forward looking statements. The company assumes no
responsibility to publicly amend, modify or revise any forward looking
statements on the basis of any subsequent developments, information or
events.
Introduction:
Reliance Petroleum Limited ('RPL' or the 'Company'), was set up to harness an
emerging value creation opportunity in the global refining sector by Reliance
Industries Limited (RIL), one of India's largest private sector company with a
significant presence across the entire energy chain and a global leadership
across key product segments. Currently, RPL is 75% owned subsidiary of RIL. RPL
also benefits from a strategic alliance with Chevron India Holdings Pte
Limited,
RPL
was formed to set up a
With
an annual crude processing capacity of 580,000 barrels per stream day (BPSD),
RPL will be the sixth largest refinery in the world. It will have a complexity
of 14.0, using the Nelson Complexity Index, ranking it amongst the highest in
the sector. The polypropylene plant will have a capacity to produce 0.9 million
metric tonnes per annum.
The refinery project is being implemented at a capital cost of Rs.270000
Millions being funded through a mix of equity and debt. This represents a
capital cost of less than US $10,000 per barrel per day and compares very
favourably with the average capital cost of new refineries announced in recent
years. The International Energy Agency (IEA) estimates the average capital cost
of new refinery in the OECD nations to be in the region. of US $15,000 to
20,000 per barrel per day. The low capital cost of RPL becomes even more
attractive when adjusted for high complexity of the refinery.
RPL's
low capital cost is a result of the benefits of 'intelligent repeat' of design
and engineering aspects of RIL's existing refinery, proactive procurement
strategy and faster implementation of the refinery project.
This is
expected to provide sustainable competitive advantage in the market place and
enable RPL to deliver superior value in the coming years.
RPL
has embarked on an aggressive implementation plan and is targeting to complete
the project within a short span of 3 years by 'intelligently replicating' the
existing refinery of RIL, through repeat efforts on the engineering,
procurement and construction fronts, with the same team, viz.
Bechtel,
UOP, Foster Wheeler that created the existing refinery of RIL at
Overview of 2006-07:
It was
the first full year and a historic one for the Company. RPL achieved several
significant milestones including a strategic alliance with Chevron, a
successful equity issue, and an award-winning debtraising effort whilst making
rapid strides on all fronts of project implementation.
Strategic
alliance with Chevron:
In a
landmark development during the fiscal year 2006-2007, RIL and Chevron embarked
on a strategic partnership in RPL with a view to optimally leverage mutual
strengths and exchange best practices to create superior value for
stakeholders.
With
operations across 180 countries worldwide, refining capacity of over 2 million
barrels per day (BPD) and a daily production of over 2.5 million barrels of oil
equivalent (BOE), Chevron brings significant expertise in the areas of refining
technologies and understanding of the crude and product markets globally.
As per
the agreement, Chevron acquired a 5% stake in RPL and also nominated a Director
on the Board of the Company. The Agreement provides Chevron with the right to
acquire an additional 24% of the equity stake in RPL on conclusion of the
collaboration agreements between Chevron and Reliance.
This
decision of Chevron to acquire an equity stake in an upcoming refinery project
is a reaffirmation of Reliance's strengths in project execution and
commissioning coupled with Reliance's talented human resource base. This also
heralds
Initial Public Offering:
In
another significant development, the Company entered the capital markets with
an initial public offering (IPO) of equity shares that met with resounding
success. As a part of the IPO, the Company offered 135 crore shares, which
included a promoters' contribution of 90 crore shares as per SEBI guidelines
and a net offer to the public of 45 crore shares at a price of Rs.60 per share,
thus raising an aggregate sum of Rs.81000 Millions.
The
IPO received an overwhelming response from investors and created several new
records in the Indian capital markets. The issue was oversubscribed 51 times
and witnessed an aggregate order book of over Rs.1430000 Millions (about US$ 32
billion), a record of sorts in the Indian context.
Importantly,
the response of institutional investors to the issue, with an oversubscription
of 68 times, reaffirmed the confidence of the global investing community in the
refinery project and prospects of the Company.
Equally
encouraging was the response from the retail investors, whose faith in the
promoters of the Company was demonstrated by over 21 lac applications received,
which was yet another new record for the Indian capital markets.
Ahead of the initial public offerings, RPL made a pre-IPO placement of 45 crore
shares to institutional investors, representing 10% of post issue paid-up
capital of the Company. The pre-IPO placement met with encouraging response
from both domestic and foreign institutional investors. The issue was
oversubscribed and shares were placed to 20 institutional investors at an issue
price of Rs.60 per share with a lock-in of 1 year as per SEBI guidelines.
Supported by the successful pre-IPO placement of equity and the IPO, the Company
has raised equity funds required for the refinery project under
implementation.
Award Winning Debt Raising
Efforts:
The
year under review also witnessed a path breaking performance by the Company in
its debt raising efforts that met with astounding success leading to several
accolades from organisations of global repute.
Through
a well executed global syndication, RPL raised foreign currency loans of US$
2.0 billion, making it the 'largest foreign currency financing for any single
project from
Being the largest foreign currency financing for any single project from
- Sponsor of the Year for 2006 - Project
Finance International
- Asian Petrochemical Deal of the Year
for 2006 - Project Finance International
- Asia-Pacific Oil & Gas Deal of the
Year for 2006 - Project Finance
- Best Syndicated Loan
- Best Project Finance Deal - Finance
- Best Syndicated Loan - The Asset
- Best Project Finance Deal for the Year
- The Asset
- Best Project Financing -
Apart from the syndicated foreign currency loan facility, the Company has also tied
tip rupee debt to the tune of Rs.11200 Millions. Negotiations are at an
advanced stage for tying up of the balance debt with the local banks as well as
Export Credit Agencies. As at the year end, the Company has drawn loan funds to
the tune of Rs.54670 Millions, towards part-financing the project under
implementation.
Rapid strides on implementation
fronts:
The
year also witnessed the achievement of several significant milestones on all
aspects of project implementation, including a successful transition from its
engineering and procurement phase to the construction phase. This has resulted
in a dramatic change in the skyline of the project site at
Project Progress Review:
During
the year, RPL secured all significant approvals required for implementation of
the refinery project, including SEZ approvals and notification of the refinery
project as an unit in the Jamnagar Special Economic Zone.
On the engineering front, significant progress has been made during the year.
While basic engineering work was complete, over 80% of detailed engineering
work was also completed. Over 93% of estimated scope of drawings for concrete
work and underground piping activities was released to the site, and the
development of structural steel drawings was about 70% at the end of the fiscal
year. Over 7,500 engineers have been commissioned across the globe at several
interconnected locations to deliver world-class engineering output for the
project. As a part of the Company's efforts to reduce construction
interferences and minimum rework at site, RPL embarked on a massive 3D site
modeling effort which is nearing completion and is expected to yield
significant benefits in the coming year.
On the
procurement front, the achievements are equally appealing. During the year, RPL
successfully concluded procurement and contracting activities for all long-
lead and critical equipment with their deliveries having commenced at site. In
fact, equipment installations are also in progress and have resulted in a
dramatic change in the skyline of the project site.
A
considerable part of other procurement and contracting activities have also
concluded. Simultaneously, the Company also made significant progress on the
procurement of bulk materials required for the project. Over 80% of the
structural steel and considerable part of piping material have been delivered
to the site and procurement of other project bulks such as, electrical
instrumentation, have been ensured to meet project requirements.
Hence
the emphasis has now shifted towards vendor monitoring to ensure compliance
with quality and delivery commitments.
Reflecting the success of a concerted implementation effort, the project
transitioned successfully from its engineering and procurement phase to the
construction phase. This was a remarkable achievement for a project of this
magnitude since the transition came about within a year of the project
commencement. So far, over 1,025,000 cubic meters of concreting work has been
completed and has gained considerable momentum in recent months.
On the
back of the development in the civil construction activities, piping and
equipment, front generation have also progressed rapidly during the year.
Nearly 40,000 tonnes of structural steel fabrication and 30% of pipe
fabrication and pipe erection work has also been completed. Overall, the
project has achieved and maintained a significant progress trend throughout the
year. With a cumulative progress of over 50% being achieved, there is greater
confidence on sustaining. the momentum and timely completion of the project by
December 2008. The timely completion of the refinery project will enable the
Company to benefit from an early mover advantage and reap the benefits of
emerging opportunities in the sector whereby creating superior value for its
stakeholders.
Industry Overview and Prospects:
While
crude prices continued to be volatile, demand trend remained positive
notwithstanding high oil prices. Tightening product specifications added
pressure on an already stretched refining system accompanied by a slow growth
in new capacities. Complex refiners gained further from high light-heavy
differentials which reflected the change in global crude dynamics.
Positive demand dynamics:
Supported
by robust global economic growth, the strong demand for petroleum products
continued, notwithstanding higher prices. The global economy grew by a notable
4.8% in 2006 despite concerns about tighter financial market conditions, high
oil prices and inflation. A key contributor to the positive growth trend has
been the Asian region, which grew by 8.4%, led by
Global demand for petroleum products grew steadily from 83.5 million BPD to
84.2 million BPD in 2006. While demand from Non-OECD countries grew by 1.1
million BPD, driven by
Supported
by a positive economic outlook, the International Energy Agency (IEA) expects
to see continued strong growth in global demand for petroleum products and
forecasts it to grow by 1.8% to 85.7 million BPD in 2007, driven mainly by
Amidst
strong growth, the industry witnessed the continuing trend of a gradual shift
in demand in favour of lighter, transportation fuels. During calendar year
2006, aggregate demand for gasoline, middle distillate and jet kero grew by
2.2% as against an average demand growth of only 1.5% for heavier products.
Given expectations of continued shift in demand patterns, industry experts
forecast light refined products (excluding LPG) to account for about 80% of
incremental demand for petroleum products globally over the next 5 years.
Strong demand growth is expected to come from gasoline, middle distillate and
Jet Kero, which are expected to record a compounded annual growth rate of 2%,
2.4% and 2.8% respectively during 2006-2010.
Residual
fuel oil is expected to show an insignificant growth of 0.1% per annum during
this period.
Meanwhile, the industry witnessed further tightening of product specifications
across regions globally. The
Refinery
capacity and utilization trends:
In
contrast to strong demand growth during 2006, global refining capacity grew
only marginally, from 84.9 million BPD to 85.7 million BPD, on the back of
capacity creep by select players. This resulted in additional pressure on the
global refining system that was already stretched with operating rates at about
86%, which is amongst the highest levels witnessed in the last two decades. The
average capacity utilization for refineries in North America, Europe and
Looking
beyond, IEA estimates a global crude distillation capacity requirement of about
11.6 million BPD towards meeting estimated global demand by 2011. Though
several large capacity announcements have taken place in recent years, their
progress so far has been quite slow on account of rising costs and manpower
shortages. In an already stretched refining environment, it raised concerns on
the ability to meet incremental demand growth and improved prospects for
refining margins, especially for complex refiners.
GRM performance:
The
year witnessed significant volatility in refining margins globally.
Though
regional benchmarks averaged lower than their respective peaks in 2006, complex
margins reached a new high of $13.6 per barrel during the first half, supported
by tightened product markets, booming light product cracks and unplanned
maintenance by large refiners. However, simple margins dropped on the back of
improved utilization, lower turnaround rate and fuel switching in
Also,
the crack spreads remained healthy during the year under review. The crack
spread for gasoline in
Viewed
in the context of robust growth in demand, stretched utilisation levels and
lagging new capacities, the medium term outlook for refining margins appear
positive. Also supportive of the margins is the expectation that the refinery
bottleneck is unlikely to disappear before 2011 due to delays in completion of
some major new refinery projects. Changes in product specifications are also
leading to lower yields of clean products as the refiners reconfigure their
processes to meet specifications. Complex refiners would gain further from (i)
higher premiums for ultra clean products in the western markets arising from
tightening product specifications and (ii) changing crude dynamics resulting in
wider light-heavy differentials. Being a highly complex refinery, RPL is thus
well positioned to capitalise on the positive trends in the coming years.
Crude price movements and
outlook:
During
the year, crude prices remained volatile and touched a new high, with the WTI
peaking at $76.95 per barrel in August 2006. Spurt in crude prices were due to
a combination of geopolitical events and unplanned outages of some of the oil
production fields.
Though
prices softened later to $59 per barrel levels by October 2006, Brent, WTI and
Opportunities:
The Company sees an exciting opportunity in global refining on the back of continuing
strong demand for petroleum products, supported by robust economic growth
outlook. Slow growth in capacities due to an ongoing thrust on capacity
modernisation and upgrades by existing refiners and a continuing delay in
implementation of new capacities are expected to throw open exciting trade
opportunities, especially for ultra clean transportation fuels that meet the
stringent product specifications of the developed economies. While these would
support superior margins, the Company foresees additional margin opportunities
in wider light heavy differentials that can be captured by leveraging its
complexity for processing heavier crude varieties. RPL intends to capitalise on
these opportunities by leveraging the project's key competitive strengths.
Persons constituting Group coming within the definition of
‘group’ as defined in the Monopolies and
Restrictive Trade Practices Act, 1969 include the following
:
- Reliance
Industries (
- Reliance
Jamnagar Infrastructure Limited
- Reliance LNG
Limited
- Reliance
- Reliance
Nutraceuticals Private Limited
- Reliance
Petroinvestments Limited
- Reliance
Pharmaceutical (
- Reliance
Poyolefins Private Limited
- Reliance
Retail Finance Limited
- Reliance
Retail Insurance Broking Limited
- Reliance
Retail Limited (RRL)
- Reliance
Strategic Investments Limited
- Reliance
Technologies LLC
- Reliance
Ventures Limited (RVL)
- RESQ Limited
- Retail
Concepts and Services (
- Reliance
Industries Limited (Promoter)
- Chevron
- Ranger Farms
Limited
- Reliance
Aromatics and Petrochemicals Private Limited
- Reliance
Chemicals Private Limited
- Reliance
Commercial Associates Private Limited
- Reliance
Dairy Foods Limited
- Reliance Do Brasil
Industria E Commercia De Portudos Texteis Quimicos, Petroquimicos E
Derivados Limiteda (Reliance
- Reliance
Energy and Project Development Private Limited
- Reliance
Europe Limited
- Reliance
Exploration & Production – DMCC
- Reliance
Global Management Services Private Limited
- Reliance
Haryana SEZ Limited
- Reliance
Industrial Infrastructure Limited
- Reliance
Industrial Investment & Holdings Limited
FIXED
ASSETS
- Building
- Plant and Machinery
- Furniture and Fixture
- Vehicles
AS PER WEBSITE DETAILS
Promoters
Promoters
are Reliance Industries Limited (“RIL”), which owns 75% of their equity share
capital. On April 20, 2006, Chevron
The Reliance Group, founded by
Dhirubhai H. Ambani (1932-2002), is
The Group's activities span
exploration and production of oil and gas, petroleum refining and marketing,
petrochemicals (polyester, fibre intermediates, plastics and chemicals) and
textiles.
Reliance enjoys global leadership
in its businesses, being the largest polyester yarn and fibre producer in the
world and among the top five to ten producers in the world in major
petrochemical products.
The Group exports products worth
USD 5 billion to more than 100 countries in the world. There are 25,000
employees on the rolls of Group Companies. Major Group Companies are Reliance
Industries Limited and Indian Petrochemicals Corporation Limited
Reliance Industries Limited
Reliance Industries Limited (RIL)
is India's largest private sector company on all major financial parameters
with turnover of Rs 891240 Millions (US$
20 billion), cash profit of Rs 131740 Millions
(US$ 3 billion), net profit of Rs 90690 Millions (US$ 2 billion), net worth of
Rs 498040 Millions (US$ 11 billion) and total assets of Rs
930950 Millions (US$ 20.9 billion).
RIL is the first and only private sector company from India to feature in the
Fortune Global 500 list of 'World's Largest Corporations' and ranks amongst the
world Top 200 companies in terms of profits, RIL is also ranked amongst the top
25 climbers in the list for second consecutive year. RIL emerged in the world's
10 most respected energy/chemicals companies and amongst the top 50 companies
that create the most value for their shareholders in a global survey and
research conducted by PricewaterhouseCoopers and Financial Times in 2004. RIL
also features in the Forbes Global list of world's 400 best big companies and
in FT Global 500 list of world's largest companies.
Press Release
Reliance Petroleum Board appoints Mike Warwick as Director
Mumbai, July 23, 2007: The Board of Directors of Reliance
Petroleum Limited ('RPL') approved the appointment of Mr. Mike Warwick as a
director of the company.
An oil industry veteran, Mr. Warwick has over three decades
of experience in various markets across the globe. He retired last year as CEO
of Shell Trading the vehicle responsible for the global trading activities of
the Shell group in Oil, Gas, Power and Chemicals and the world’s largest
physical trader in crude oil and refined products.
A notice to this effect has already been sent to the Stock
Exchanges.
RPL achieves overall project progress of 65%
Refinery on track for timely completion
Reliance
Petroleum Limited (“RPL”) continues to
make
rapid progress in implementation of its large, complex refinery, coming up in a
SEZ at
During
the quarter, project implementation gained further momentum and led to
achievement of several significant milestones, including the following:
•
Engineering efforts peaked and cumulative engineering progress crossed the 90%
mark.
• Procurement
and contracting activities nearly completed.
•
Deliveries of critical, long lead equipments and over dimensional consignments
(ODCs) have commenced and their installation is underway.
•
Civil construction is nearing completion
•
Dramatic change in the skylines with over 500 equipments already installed at
the site.
The
progress on the engineering front has been excellent. The entire scope of
drawings for concreting and underground piping is released for construction. Over
90% of drawings required for structural steel fabrication and 85% of piping
have been completed. The focus has shifted towards engineering close-out for
most of the units. This massive team effort involved over 7,500 engineers, who
worked from several interconnected locations across the world.
The
quarter witnessed near completion of procurement activities for most
equipments, tagged items and substantial part of bulk materials. Deliveries and
installation of critical, long lead and heavy equipments have commenced. Focus
is now on vendor expediting and follow-up to ensure compliance with quality and
delivery commitments for the balance equipments.
The
construction activities gained further momentum with massive resource
mobilization efforts and near peak implementation force already at the site.
Over 1.3 million cubic meters of concrete has been poured so far. On the back
of remarkable construction progress, 50% of structural steel fabrication, 75%
of tankage fabrication and nearly 30% of pipe fabrication and installation has
also been completed.
Meanwhile,
the global industry fundamentals have strengthened further and promise exciting
value creation opportunities for large and complex refiners. Supported by
robust economic growth outlook, global demand for petroleum products is
expected to grow stronger. Slow growth in capacities due to thrust on
modernisation and upgrades by existing refiners and continuing delays in new
capacities are expected to keep supplies under pressure and throw open exciting
trade opportunities especially for ultra clean transportation fuels. Reflecting
the
skewed
demand supply balance, refining margins are expected to remain firm in the
foreseeable future. Complex refiners will gain further from the continuing
wider light heavy differentials.
Commenting
on the project progress at the maiden Annual General Meeting of the Company
since the IPO, Mr Mukesh Ambani, Chairman of RPL said “We are well on our way to recreate history of successfully completing
the project in a record time frame. I am pleased with the rapid progress
achieved by RPL on all fronts of implementation. I would like to compliment the
entire RPL team for a successful lift-off of the project. The team is fully
equipped to sustain the rapid pace of construction in the coming quarters. “
RPL
refinery project completes one year since kick-off.
Significant
progress achieved on all fronts
Refinery
execution on fast track for completion by December 2008
MUMBAI,
12th January 2007:
Reliance Petroleum Limited (RPL) successfully completed the first year of
implementation of its world-class complex refinery, being built in a special
economic zone at
The
refinery project has made rapid strides on all implementation fronts, including
physical progress at the site and has achieved several key milestones during
the first year itself. Significant accomplishments since the project kick-off
include the following:
• All
statutory approvals, including SEZ approvals, have been obtained.
• The
equity financing of the project was completed through a highly successful IPO
that established several new records in the Indian capital markets.
•
Through successful global syndication, RPL obtained commitments for US$2bn of debt,
which is the largest foreign currency financing for any single project from
• RPL
concluded a strategic partnership with Chevron.
• Basic
engineering and a major part of detailed engineering is complete.
• All long
lead and critical equipments have been ordered and remaining procurement/
contracting activities are nearing completion.
•
Construction work at site has taken-off and is progressing at a rapid pace.
The
fast track implementation of the project has led to substantial change in the
skyline of the project site with civil, structural and mechanical works in full
swing. RPL has developed sufficient site infrastructure to sustain construction
on fast track and is ready to receive peak implementation workforce required
for the project. RPL has thus set a perfect launch pad for creating new
industry records for project implementation and is well on its way towards
scheduled completion by December 2008.
The
engineering progress achieved thus far has been commendable. Nearly two-thirds
of detailed engineering work is complete and a substantial part of concrete,
underground and structural steel drawings have been released to the site. A
massive 3D site modelling effort is underway and is expected to provide benefits
of superior engineering quality, reduced construction interferences and minimum
rework at site. Over 7,500 engineers are working on the project at several
interconnected locations across the globe.
On the
procurement front, RPL has made significant strides. All long lead and critical
equipments have been ordered and a substantial part of overall procurement and
contracting activities has been completed. Equipment deliveries have commenced
and more than 80% of structural steel and a significant part of piping
materials have also been delivered to the site. Emphasis has now shifted
towards vendor monitoring and follow-up for ensuring compliance with quality
and delivery commitments.
The
construction activities have gained further momentum with over 600,000 cubic
meters of concreting already completed (equivalent to several scores of
skyscrapers). The month of December 2006 witnessed the creation of a new record
with over 168,550 cubic metres of concrete poured in a single month. Through
this, RPL has even surpassed the record created during the implementation of
RIL’s refinery at
At the
industry level, the global refining fundamentals remain intact and promise
exciting value creation opportunity for complex refineries. The continuing
shortage of global refining capacities coupled with tightening product
specification, slow growth in desulphurization capacities and widening light heavy
differentials is expected to result in widening demand supply gap for
transportation fuels globally. Buoyant outlook for the global economy augurs
well for petroleum products demand and reinforces confidence on the long term
prospects for the sector.
Commenting
on the progress Mr Mukesh Ambani, Chairman of Reliance Petroleum Limited said “I am extremely
encouraged by the rapid progress made by RPL on all aspects during the first
year of implementation. The substantial progress achieved at site gives me
further confidence that the refinery is well on its way towards scheduled
completion by December 2008. RPL is well positioned to capitalise on the
emerging opportunities in the sector and create superior value for its
shareholders”.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or investigation
registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No available
information exist that suggest that subject or any of its principals have been
formally charged or convicted by a competent governmental authority for any
financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.39.74 |
|
|
1 |
Rs.80.34 |
|
Euro |
1 |
Rs.56.30 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
- |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
- |
|
--PROFITABILIRY |
1~10 |
- |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
48 |
This score serves as a reference to assess SC’s credit risk and
to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|